GM expects Cadillac to grow 40% this year in China

General Motors is expecting Cadillac to hike its sales in China at least 40 percent in 2014 to 70,000 units, as it ramps up local output in the largest auto market in the world, GM China Vice President John Stadwick told Reuters in an interview.

GM’s luxury brand saw its sales in China jump 72 percent in the first half of 2014, outpacing the 32-percent growth in the country’s premium vehicle market. He remarked that Cadillac’s presence in China will be a key to its goal of becoming a global brand.

He remarked that GM’s leadership is providing focus to make sure Cadillac does it right in China. McKinsey & Co has forecast that China may overtake the United States as the largest market for premium cars. To boost growth in China, GM is bound to unveil a second Cadillac model in August that will be produced in the country.

GM will also announce a third Cadillac model early next year, Stadwick divulged. GM is focusing on local production to avoid high import taxes, thereby allowing Cadillac to be priced more competitively in China against German premium brands BMW, Audi and Mercedes-Benz.

The German brands all have local productions in China. Stadwick quipped that Cadillac believes in building where it could sell, which means there will be fewer imported and more locally built Cadillacs in China in the future.

He noted that the strategy provides Cadillac an advantage against rivals who don't have local output, like Lexus. Lexus has no plans to build cars in China due to its emphasis on quality, according to Lexus chief Tokuo Fukuichi.

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